This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Comprehensive guide to the types of trusts used in wills in England and Wales. Explains bare trusts, life interest trusts, discretionary trusts, bereaved minor and age 18‑25 trusts, how they work, and practical considerations for estate planning.
A trust in a will (often called a testamentary trust) is a legal arrangement created by someone who has died (the testator) under the terms of their will. The trust holds assets for the benefit of one or more beneficiaries, managed by trustees appointed in the will. Trusts in wills allow more control over how and when beneficiaries receive assets and can help protect vulnerable beneficiaries, minors, and complex family arrangements.
This article explains the principal types of trusts commonly used in wills in England and Wales, how they work, and when they might be used. It also notes specific statutory trust forms that receive particular tax or legal treatment.
What Is a Will Trust?
A will trust comes into effect when a person dies and their will directs that certain assets are held by trustees rather than immediately passing directly to a beneficiary. The trustees manage, invest, and distribute trust property in accordance with the terms of the will and relevant law.
Trusts arise in wills when an outright gift is not appropriate because:
- A beneficiary may be too young to manage assets.
- A beneficiary's needs or circumstances are uncertain.
- The testator wishes to preserve capital for future generations.
- Protection from creditors, relationship breakdown, or eligibility for public benefits is required.
1. Bare Trusts
Definition: A bare trust is the simplest form of trust. Under this arrangement, trustees hold assets for a beneficiary who has an immediate and absolute right to both income and capital when they reach the age of 18 (or 16 in Scotland).
How It Works:
At death, the assets are held by trustees for the named beneficiary. While the beneficiary is under age 18, trustees manage the assets on their behalf. Once the beneficiary attains 18, they are entitled to receive the assets outright.
Typical Use:
Bare trusts are commonly used to provide for children or young adults who are not yet 18 and would otherwise receive an outright gift that they cannot legally manage.
2. Interest in Possession Trusts (Life Interest Trusts)
Definition: An interest in possession trust (also called a life interest trust) gives a beneficiary the right to receive income from the trust assets (or benefit from an asset, such as living in a property) during their lifetime.
How It Works:
The named beneficiary, often a spouse or partner, receives all income generated by the trust assets while they are alive. They do not own the capital held in trust. On the death of the income beneficiary, the capital passes to the next beneficiaries specified in the will (e.g., children).
Typical Use:
These trusts are common in second marriage cases, where a testator wants to provide a lifetime benefit for a spouse but ultimately preserve capital for children from a prior relationship.
3. Discretionary Trusts
Definition: A discretionary trust gives trustees discretion over how income and capital are distributed among a group of beneficiaries. Beneficiaries do not have fixed entitlements.
How It Works:
Trustees can decide:
- Which beneficiaries receive payments.
- Whether to distribute income, capital, or both.
- The timing and extent of distributions.
This flexibility allows trustees to respond to changing circumstances or needs.
Typical Use:
Discretionary trusts are useful where beneficiaries may have special needs, financial difficulties, or where the testator wants to provide for a class of people (e.g., grandchildren) without guaranteeing fixed shares.
4. Bereaved Minor and 18‑to‑25 Trusts (Statutory Trusts)
Certain statutory trust forms arise when gifts are made to children or young persons and meet defined criteria under the Inheritance Tax Act 1984. These trusts have favourable tax treatment and specific age limits.
Bereaved Minor Trust:
- Applies where a gift is made to a child under 18 who has lost a parent.
- Trustees hold the assets until the child reaches 18, using income or capital for their benefit.
- The beneficiary becomes absolutely entitled at 18.
18‑to‑25 Trust:
- Similar to a bereaved minor trust but applies where the beneficiary is to receive full entitlement by age 25.
- Trustees can apply income or capital for the beneficiary's benefit before that age.
These statutory trusts are excluded from immediate registration on the Trust Registration Service for a defined period but may carry distinct tax consequences.
5. Accumulation and Maintenance Trusts (Historic)
An accumulation and maintenance trust historically allowed trustees to accumulate income and pay it out for the maintenance, education, or benefit of beneficiaries. These trusts have largely been replaced by the statutory forms described above but may still exist in older wills.
6. Other Trust Forms Mentioned in Practice
Beyond the principal types above, other trust terms may appear in wills:
- Protective Trust: Designed to protect income for a beneficiary but may convert or restrict benefits if specified events (e.g., bankruptcy) occur.
- Secret Trusts: Trusts where the details or beneficiaries are not fully disclosed in the will but were communicated separately to trustees before death. These require clear evidence to be upheld under equity principles.
- Statutory Administration Trusts: On intestacy, assets may be held by personal representatives on trust pending sale or distribution. These are not express trusts created by the will but operate under statutory rules.
Choosing the Right Trust in Your Will
The appropriate trust depends on individual circumstances, including:
- The age and capacity of beneficiaries.
- Family structure and marital history.
- Financial needs and vulnerability.
- Tax planning considerations.
Trusts can affect eligibility for means‑tested benefits and have implications under inheritance tax and capital gains tax regimes. Professional advice from a solicitor or legal adviser specialising in wills and trusts is recommended before drafting or amending a will containing trusts.
Key Takeaways
Trusts in wills are mechanisms that allow testators to direct how and when assets are used and distributed after their death. Principal types include:
- Bare trusts: Simple trusts for minors until age 18.
- Interest in possession (life interest) trusts: Provide income or use rights for life.
- Discretionary trusts: Offer trustee flexibility for a group of beneficiaries.
- Statutory trusts (bereaved minors and 18‑to‑25): Specific trusts with beneficial tax treatment.
Each trust type has distinct legal and tax implications and should be selected with care to match the testator's intentions and beneficiaries' needs.
